Profits Interest Negotiation
Currently negotiating a profits interest as part of a job offer I received from a portfolio company I cover at my PE shop. I’ve got info on current employees profits interests. Can I (and should I) benchmark myself vs others to determine relative value? Is that acceptable to bring up in the negotiation? Acknowledge there’s also an intrinsic approach to take.
Trying to ultimately negotiate a more desirable outcome for myself than what was initially offered while also managing/predicting management’s reaction to my counter and without overstepping and inevitably coming off as the entitled PE guy.
I believe I was relied upon meaningfully in the past few years in multiple m&a txns, company takes little risk on me (culturally a fit, have seen my work product and work ethic, no learning curve, no time (and $) spent recruiting) and have relationships and inside view on the sponsor relationship. (I welcome any other benefits to highlight here)
Looking for general negotiating advice, personal experiences, game theory strategy here. Thanks all in advance.
Bump
Of course you should comp yourself to others. You should also know what the partner is willing to give (some hold onto incentive equity tightly, some are looser).
At the end of the day, whatever they allocate to me comes out of their pockets; I would expect any CEO to hold tightly to meaningful equity incentive, but tend to agree with your relative valuation tactic.
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